Compiled financial statements represent the most basic level of service that certified public accountants provide with respect to financial statements. In a compilation, the CPA must comply with certain basic requirements of professional standards, such as having a knowledge of the client's industry and applicable accounting principles, having a clear understanding with the client as to the services to be provided, and reading the financial statements to determine whether there are any obvious departures from generally accepted accounting principles (or, in some cases, another comprehensive basis of accounting used by the entity). It may be necessary for the CPA to perform "other accounting services" (such as creating a general ledger for the client, or assisting the client with adjusting entries for the books of the client (before the financial statements can be prepared). Upon completion, a report on the financial statements is issued that states a compilation was performed in accordance with AICPA professional standards, but no assurance is expressed that the statements are in conformity with generally accepted accounting principles. This is known as the expression of "no assurance." Compiled financial statements are often prepared for privately-held entities that do not need a higher level of assurance expressed by the CPA.
Engagement letters are an essential part of the professional relationship between an accounting firm and its clients, ensuring that both parties are aware of their rights and responsibilities. For clients seeking a review of their financial statements or a compilation, Riverside California offers various types of engagement letters catered to their specific needs. Riverside California Engagement Letter for Review of Financial Statements: When a business or organization requires a review engagement, an engagement letter is prepared to outline the terms and conditions for conducting the review of financial statements. This engagement letter serves as a legally binding agreement between the accounting firm and the client, ensuring transparency and clarity throughout the review process. It typically includes detailed information regarding the scope of work, responsibilities of both parties, timelines, and fees associated with the review. Riverside California Engagement Letter for Compilation of Financial Statements: For clients who require the preparation of compiled financial statements, an engagement letter specific to this service is prepared by the accounting firm. The engagement letter for compilation outlines the procedures and responsibilities of the firm in compiling financial information provided by the client. It specifies that the financial statements are not audited or reviewed and are solely the representation of the client. This letter also highlights the limitations of a compilation engagement and ensures that the client understands the purpose and use of compiled financial statements. Keywords: Riverside California, engagement letter, review of financial statements, compilation, accounting firm, terms and conditions, scope of work, responsibilities, timelines, fees, prepared, procedures, audited, reviewed, limitations, purpose, use. Please note that the above information is a general description and may vary depending on the specific engagement letter drafted by the accounting firm in Riverside, California. It is always recommended consulting with a professional accountant or legal advisor for accurate and personalized information.Engagement letters are an essential part of the professional relationship between an accounting firm and its clients, ensuring that both parties are aware of their rights and responsibilities. For clients seeking a review of their financial statements or a compilation, Riverside California offers various types of engagement letters catered to their specific needs. Riverside California Engagement Letter for Review of Financial Statements: When a business or organization requires a review engagement, an engagement letter is prepared to outline the terms and conditions for conducting the review of financial statements. This engagement letter serves as a legally binding agreement between the accounting firm and the client, ensuring transparency and clarity throughout the review process. It typically includes detailed information regarding the scope of work, responsibilities of both parties, timelines, and fees associated with the review. Riverside California Engagement Letter for Compilation of Financial Statements: For clients who require the preparation of compiled financial statements, an engagement letter specific to this service is prepared by the accounting firm. The engagement letter for compilation outlines the procedures and responsibilities of the firm in compiling financial information provided by the client. It specifies that the financial statements are not audited or reviewed and are solely the representation of the client. This letter also highlights the limitations of a compilation engagement and ensures that the client understands the purpose and use of compiled financial statements. Keywords: Riverside California, engagement letter, review of financial statements, compilation, accounting firm, terms and conditions, scope of work, responsibilities, timelines, fees, prepared, procedures, audited, reviewed, limitations, purpose, use. Please note that the above information is a general description and may vary depending on the specific engagement letter drafted by the accounting firm in Riverside, California. It is always recommended consulting with a professional accountant or legal advisor for accurate and personalized information.
